A Look at Alvotech (NasdaqGM:ALVO) Valuation Following FDA Setback and Revenue Guidance Cut

Alvotech (NasdaqGM:ALVO) stock stumbled after the company disclosed a setback with its AVT05 biosimilar, prompted by an FDA Complete Response Letter outlining manufacturing deficiencies and a significant reduction in its 2025 revenue guidance.

See our latest analysis for Alvotech.

After a long stretch of promising clinical milestones and regulatory approvals in Europe, Alvotech’s share price has now tumbled sharply, down nearly 39% in the past month, following the steep cut to its 2025 revenue outlook and renewed regulatory scrutiny in the US. Despite earlier litigation wins and earnings that signaled operational momentum, this wave of uncertainty has clearly shifted sentiment, and the one-year total shareholder return now sits at -57%, starkly underperforming broader biotech peers and reflecting investor concerns about execution risk and near-term growth potential.

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With shares trading far below analyst targets and the company’s biosimilar approvals advancing in other major markets, the real question is whether Alvotech’s challenges are already reflected in the stock price or if more pain lies ahead for investors seeking a bargain.

Most Popular Narrative: 80.5% Undervalued

Alvotech's current share price stands far below the narrative's estimated fair value, suggesting there may be a significant mispricing in the market. With analyst expectations well above recent trading levels, the narrative’s core drivers are worth a closer look.

Ongoing launch and approval pipeline activity, including upcoming regulatory decisions in major global markets (for AVT03, AVT05, AVT23, and others), positions the company to tap into blockbuster biologic markets coming off-patent. This could potentially drive a step-change in topline revenue once approvals are secured.

Read the complete narrative.

Want to uncover the engine behind this eye-catching fair value? Inside are aggressive forecasts for future revenue acceleration and a bold jump in profit margins. Find out which big financial levers underpin the analysts’ striking upside.

Result: Fair Value of $26.40 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent regulatory delays or heightened price competition could quickly challenge the bullish case if Alvotech struggles to resolve manufacturing issues or to defend margins.

Find out about the key risks to this Alvotech narrative.

Another View: Using Earnings Ratios

The SWS DCF model pegs Alvotech at deep value levels. However, examining the company's price-to-earnings ratio offers a more nuanced picture. Alvotech trades at 23.2 times earnings, which is higher than the US Biotechs group average of 18.2, but still below the peer average of 38.6. The fair ratio is calculated at 29.1.

This indicates that markets see more risk here compared to peers, but not enough upside yet for a full rerating. Which side of the value debate will win out as sentiment shifts?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Alvotech Narrative

If you want to see the numbers from a different angle or craft your own perspective, it takes less than three minutes to build a new story yourself. Do it your way

A great starting point for your Alvotech research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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